GLOBAL ECONOMY WEEKAHEAD-Central bank meetings to set stage for parting of ways

* Clutch of central bank meetings loom

* No policy change expected but UK looks likely first mover

* ECB grappling with inflation falling towards zero

* Bank of Japan may nod to recent run of weak data

* India and Australia set to stay put

By Mike Peacock

LONDON, Aug. 3 After the Federal Reserve
maintained its path towards raising U.S. interest rates next
year, other major central banks will jostle for space on a
crowded stage this week.

The European Central Bank, Bank of Japan, Bank of England
and the central banks of India and Australia all hold meetings.
While imminent action is unlikely, the time when policy settings
start pointing in different directions is nearing.

U.S. growth rebounded in the second quarter and the Fed
upgraded its assessment of the economy last week. It is on
course to stop creating money in October but the expectation is
that there will be no interest rate rise before mid-2015.

That puts the Bank of England in pole position to be the
first major central bank to push rates up from their record low
0.5 percent, perhaps before the year is out.

Although the UK economy is expanding at an annualised clip
in excess of 3 percent and unemployment is tumbling, the absence
of wage pressure means there is no immediate reason to act.

The consensus is that rates will not rise until early 2015
but polling by Reuters last week found economists expect a first
voice or two on the nine-strong Monetary Policy Committee to
call for a rate rise this week.

The last time the MPC was considering raising rates was in
2006. In May of that year, one MPC member voted for a hike and
it took just three months before a majority followed suit.

"We expect the jobless rate will continue to fall rapidly,
with the BoE hiking earlier and further than markets project,"
said Michael Saunders, chief UK economist at Citi.

The voting pattern will only become public when minutes of
the meeting are released two weeks hence.

The Fed has just registered its first dissenter, with the
hawkish Charles Plosser saying the commitment to keep rates near
zero for "a considerable time" did not reflect the gains made by
the economy.

Lack of wage inflation has been a common theme in the United
States and euro zone as well, though U.S. labour costs recorded
their biggest gain in more than 5-1/2 years in the second
quarter. That spooked Wall Street last week as it may hasten the
Fed's first move.

The European Central Bank, which also meets on Thursday,
faces a very different problem to the Bank of England.

Euro zone inflation has slipped further - to just 0.4
percent in July - and if it does not start picking up soon, the
pressure to start printing money will grow despite strong
reservations within the ECB's Governing Council.

"(The inflation data) don't give any assurance that the euro
zone is already out of the deflation danger zone," said Peter
Vanden Houte, chief euro zone economist at ING.

"Moreover, with the escalating conflict with Russia
dampening growth prospects, it seems unlikely that deflation
fears will disappear any time soon."

Having cut all its key interest rates in June and unveiled a
new scheme to prime banks with cheap long-term money from
September in the hope they will lend it on, the ECB will not act
until it has had time to judge the impact of those measures.

If the ECB won't consider more dramatic action until late in
the year, it will have a small window of opportunity to act
before U.S. rates start heading higher in 2015.

Policymakers admit there is little chance of euro zone
long-term interest rates decoupling from U.S. ones if they start
rising.

NO CHANGE IN ASIA

The Bank of Japan will deliver its latest policy verdict on
Friday, following the sharpest fall in factory output since the
devastating earthquake and tsunami of 2011.

With the BOJ already having created money at a furious rate,
any policy shift is unlikely. But it may have to temper its
assessment that production is "rising moderately as a trend",
toning down its upbeat language on the outlook as it becomes
less sure about when or even if exports will rebound.

The Reserve Bank of India will leave its key interest rate
at 8 percent on Tuesday and won't ease policy until early next
year on fears food inflation will spike if monsoon rains are
below average, according to a Reuters poll.

Growth is slowing and has stayed below 5 percent in the past
two years, well below levels needed to create enough jobs for
India's young and expanding workforce.

The Reserve Bank of Australia is also expected to hold rates
at 2.5 percent when it meets on Tuesday. Its next move is likely
to be up rather than down, but not until next year.

Chinese trade data are due on Friday, kicking off the
monthly run of indicators.

Latest survey evidence from the world's number two economy
showed factories posted their strongest growth in at least 1-1/2
years in July, adding to evidence that the economy is gaining
momentum after a spate of state stimulus measures.

(Editing by Catherine Evans)

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